Assume You Sell Short 100 Shares of Common Stock at $30

Multiple Choice

Assume you sell short 100 shares of common stock at $30 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $35 per share? The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.

A) −33.33%
B) −25.63%
C) −57.14%
D) −77.23%